Jacobs Builders entered into a contract with Kent to build him a home. The agreement stated that Jacobs would use only certain brand-name materials. Upon completion of the home, Kent discovered that Jacobs had installed high-quality, but not brand-name, pipes throughout the house. This was an oversight, which even the architect failed to catch. Kent asked Jacobs to replace all the pipes, but this meant destroying all of the floors and walls in the house. Should Kent have to rebuild the house to get paid

In the case of Jacob & Youngs, Inc. v. Kent, 230 N.Y. 239 (1921), it was found by the court that if a defect is INSIGNIFICANT, the contract should still be completed because SUBSTANTIAL PERFORMANCE has still been performed by the contracted party.

The court ruled that the Measure of damages is not how much it would cost to rebuild the house, but rather the difference in the materials used.

To put it plainly, The court ruled that even though branded pipes were not used, Jacobs Builders still used high quality pipes that were of the same quality as the branded ones and so it was only an insignificant defect.

Kent is therefore not entitled to the cost of the house in damages but rather the difference in cost between the pipes Jacobs used and the ones he wanted. There was almost no difference so they were no damages and he should not rebuild his house but rather just accept the pipes in good faith and complete the contract.